Memory Industry Revenue Expected To Reach All-Time High In 2025 Due To Rise Of HBM And QLC

TrendForce) Memory Industry Revenue Expected To Reach All-Time High In 2025 Due To Rise Of HBM And QLC

DRAM and NAND flash sales are expected to register large increases of 75% and 77% in 2024, respectively, driven by higher bit demand, improved supply-demand structures and the rise of high value-added products such as HBM, according to TrendForce’s latest memory industry report.

Industrial sales are expected to continue to grow in 2025, with DRAM up 51% and NAND flash up 29% to record highs. This growth is likely to boost recovery in capital spending and rising demand for upstream raw materials, which will increase cost pressures on memory buyers.

1. HBM’s Rise Boosts DRAM Sales

TrendForce forecasts DRAM revenue to reach $90.7 billion in 2024 and $136.5 billion in 2025 as average DRAM prices rise 53% in 2024 and 35% in 2025, respectively, up 75% and 51% year over year.

TrendForce cites the rise of HBMs, the evolution of generations of generic DRAM products, supply restrictions due to curbs on capital expenditures by manufacturers, and the recovery of server demand as the four main factors behind increased DRAM sales. Compared to generic DRAMs, HBMs have the effect of increasing demand for bits and increasing average prices in the industry. HBMs are expected to account for 5% of DRAM bit shipments and 20% of sales in 2024.

In addition, penetration of high value-added products such as DDR5 and LPDDR5/5X will contribute to driving up average prices in the industry. TrendForce expects DDR5 to account for 40% of server DRAM bit shipments in 2024 and 60% to 65% in 2025. LPDDR5/5X is expected to account for 50% and 60% of mobile DRAM bit shipments in 2024 and 2025, respectively.

2. High Capacity QLC Enterprise SSD and UFS Drive NAND Flash Sales Record in 2025

TrendForce expects NAND flash sales to reach $66.2 billion in 2024, up 77% year-over-year. In 2025, NAND flash sales are expected to reach $78.6 billion, driven by the rise of high-capacity QLC enterprise SSDs, the adoption of QLC UFS in smartphones, supply restrictions due to curbs on manufacturers’ capital spending, and server demand recovery. North American CSPs have begun adopting QLC enterprise SSDs on a large scale, especially in inference AI servers with high-capacity specifications.

TrendForce predicts QLC will account for 20% of NAND flash bit shipments in 2024, with this share expected to increase in 2025. In smartphone applications, QLC is expected to gradually penetrate the UFS market, with some Chinese smartphone manufacturers planning to adopt QLC UFS solutions starting in the fourth quarter of 2024. Apple is expected to introduce QLC to iPhones by 2026.

3. Industrial ecosystem impact from increased DRAM and NAND flash sales

Record sales in the memory industry will allow manufacturers to get enough cash flow to accelerate investment, according to TrendForce. Capital spending in the DRAM and NAND flash industries is expected to rise 25% and 10% in 2025, respectively, with the potential for further upward revisions.

Expansion of memory production will increase demand for upstream raw materials such as silicon wafers and chemicals. On the other hand, rising memory prices will increase the cost of electronics. ODM/OEM companies will have difficulty transferring these costs to retail prices, which could put pressure on profit margins. This increase in cost could lower end-user sales, potentially leading to lower demand.